Former city official in Pharr gets 22-month sentence in fraud case

U.S. District Court Judge Randy Crane in McAllen this week sentenced former Pharr city commissioner Oscar Elizondo to 22 months in prison for his part in a nearly $1.8 million insurance scheme with an area pharmacy owner.

Omar Espericueta, 46, owner of Riverside Pharmacy in Penitas, just west of McAllen, was to have been sentenced along with Elizondo Wednesday, but his sentencing was reset for sometime in May 2019.

Elizondo, 48, who worked as a marketer for Espericueta, was convicted in November for his part in filing false claims for expensive pain relievers and other drugs with Blue Cross and Blue Shield of Texas, as The Texas Monitor reported at the time. Two days later, Espericueta was convicted in the fraud scheme.

As part of a plea agreement Elizondo must reimburse Blue Cross Blue Shield $1,484,268.05.

In court Wednesday, Crane chastised Elizondo for a “blatant fraud,” a “complete ruse” that took advantage of Frontera Produce, Point Isabel Independent School District and the cities of Mission and Pharr, among others that fund their own health insurance programs through Blue Cross Blue Shield, U.S. Atty. Ryan Patrick said in a release.

According to the indictment handed down by a McAllen grand jury in July 2017, Elizondo and Espericueta assembled a group of “marketers” to obtain insurance information from employees of businesses with Blue Cross insurance all over the Rio Grande Valley.

These marketers plied their targets with meals and drinks and promised them expensive prescription pain patches and scar creams in exchange for their information, according to the indictment.

Over five months beginning in late 2015, the conspirators directed these insurance holders to see Dr. Pedro Garcia, with whom they “had made arrangements to sign fraudulent prescriptions in exchange for cash, fake loans and prescription painkillers,” the indictment said.

Sometimes Garcia met with patients in a vacant office arranged by Elizondo and Espericueta. For a while they rented a recreational vehicle and parked it next to a local restaurant, where they recruited policy holders and ushered them into the RV to see the doctor, the indictment said.

And sometimes false prescriptions were drafted without any contact with a doctor, the indictment said.

Garcia, 70, of Mission, pleaded guilty in February 2017 to conspiracy to commit health care fraud before federal District Judge Ricardo Hinojosa, after making a deal with federal authorities for a reduced sentence.

The conspirators submitted hundreds of fraudulent claims to Blue Cross and Blue Shield, filing for multiple refills of prescriptions for which the pharmacy was paid but never delivered, the indictment said.

The Mission Police Department, the fraud unit of the Texas Department of Insurance, the Texas Health and Human Services Commission and the FBI cooperated in the investigation.

Mark Lisheron has more than 30 years of experience in newspapers and was most recently the managing editor for Reason.com. He also served as deputy editor, national reporter and Austin bureau chief for Watchdog.org. He was the founding Austin bureau chief for the bureau's predecessor, Texas Watchdog, winning the First Amendment Award from the Society of Professional Journalists in Texas.